Friday, July 3, 2009

A New Comparative Analysis of Housing Price Indices

I applaud Rebecca Wilder for doing some hard work. I have not yet studied the details, but she seems to be saying that some of the Western cities are getting too much weight in the Case-Shiller index, and as a result the OFHEO index is giving a more accurate picture.

That agrees with my rough impression. If we are right, housing prices suggest that the housing market has bottomed, although construction spending is not yet supporting that conclusion.

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Supply and Demand (in that order)

The basic tools of supply and demand help immensely to understand and predict everyday events in our world. These days, many of those events are related to the Redistribution Recession of 2008-9. But I also look at other issues related to fiscal policy, labor economics, and industrial organization.